Corporate report

Framework document: Active Travel England

Updated 3 August 2023

Applies to England

Background

Active Travel England (ATE) has been established as an executive agency of the Department for Transport (DfT). It has the overall objective to enable achievement of the vision set out in the PM’s long-term walking and cycling plan, Gear Change, for half of all journeys in towns and cities to be cycled and walked by 2030, transforming the role that walking and cycling play in England’s transport system, and making England a great walking and cycling nation.

ATE has been established as an executive agency of the DfT as designated by the Secretary of State. As an executive agency it follows ‘Model 2’ as outlined in the Cabinet Office guidance Executive Agencies: A Guide for Departments (PDF, 0.98MB) . This structure means that ATE has a formal Management Board, led by an influential national Commissioner (who is also appointed ATE Chair) to allow it to provide strong leadership and constructive challenge to local authorities. This structure gives the flexibility to recruit Non-Executive Board members with specialist expertise and diverse experience who could robustly challenge and advise the body, as well as local authority and other senior stakeholders.

Purpose of document

This Framework Document (the Framework Document) has been agreed between DfT and ATE in accordance with HM Treasury’s handbook Managing Public Money (MPM) (as updated from time to time) and has been approved by HM Treasury.

The Framework Document sets out the broad governance framework within which ATE and DfT operate. It:

• sets out ATE’s core responsibilities
• describes the governance and accountability framework that applies between the roles of DfT and ATE
• sets out how the day-to-day relationship works in practice, including in relation to governance and financial matters

The document does not convey any legal powers or responsibilities but both parties agree to operate within its terms.

References to ATE include all its subsidiaries and joint ventures that are classified to the public sector and central government for national accounts purposes. If ATE establishes a subsidiary or joint venture, there shall be a document setting out the arrangements between it and ATE agreed with DfT.

Copies of the document and any subsequent amendments have been placed in the Libraries of both Houses of Parliament and made available to members of the public on gov.uk.

This Framework Document will be amended in 2023 and thereafter be reviewed and updated at least every 3 years unless there are exceptional reasons that render this inappropriate that have been agreed with HM Treasury and the Principal Accounting Officer of the sponsor department. The latest date for review and updating of this iteration shall be August 2023.

Objectives

DfT and ATE share the common objective of delivering increases in active travel to 50% of all journeys in urban areas. To achieve this ATE and DfT will work together in recognition of each other’s roles and areas of expertise, providing an effective environment for ATE to achieve its objectives through the promotion of partnership and trust and ensuring that ATE also supports the strategic aims and objective of DfT and wider government as a whole.

ATE will support the department’s objectives by driving up standards and the capacity and motivation of local authorities and other organisations providing transport works to deliver active travel infrastructure and provide best practice design standards. It will manage funding for dedicated walking and cycling initiatives and challenge failure by withholding funding for failure to meet standards. It will assess the compliance of schemes in the City Region Sustainable Transport Fund, Roads Investment Strategy 2, the Levelling Up Fund and other significant departmental investments that deliver active travel and prevent funding for schemes that do not meet DfT design guidance. It will offer training and be a repository of best practice guidance for local authorities and developers working to ensure active travel design is embedded in new developments.

Classification

ATE has been classified to central government by the Office for National Statistics and HM Treasury Classifications team. It has been administratively classified by the Cabinet Office as an Executive Agency.

Purpose

ATE will deliver executive functions that require high levels of expertise that are not available in the department such as highways design specialists, engineers and town planners. An executive agency model will allow ATE a degree of operational independence from everyday ministerial matters and policy, enabling it to be better structured to deliver its services and operational functions in a timely fashion.

ATE will have direct relationships with local authorities that are distinct from that of the department. The separation of policy – which will remain with the department – and delivery – which will move to ATE – will mean that ATE as an executive agency can focus on technical advice, review and inspection functions, in a similar way to Ofsted.

An executive agency is consistent with what is outlined in Gear Change in that it would clearly be a new body. By creating a specialist agency concerned solely with standards and delivery, government is showing a clear commitment to driving up design quality.

ATE has been established as an executive agency of DfT with the overall objective to achieve a step-change in walking (including wheeling – using wheelchairs and mobility scooters) and cycling, transforming the role that walking and cycling play in England’s transport system, and making England a great walking and cycling nation.

ATE will hold the active travel budget, including for behaviour change and cycle training. It will assess all applications for active travel capital and revenue funding, including from wider funds such as the City Region Sustainable Transport Fund, the Levelling Up Fund and RIS2. It will award funding to schemes only if they meet the standards and principles set out in Local Transport Note 1/20 , or any later national design standards. (Gear Change was clear that to receive government funding for local highways investment where the main element is not walking or cycling improvements, there will be a presumption that all new schemes will deliver or improve cycling infrastructure to the new standards laid down, unless it can be shown that there is little or no need for cycling in that particular road scheme. ATE will also assess these schemes.)

ATE will also be responsible for:

• inspecting schemes on completion to ensure compliance with the design standards and withdrawing funding for any which have not started or finished within the stipulated timeframe
• delivering training, developing best practice and sharing knowledge to raise standards in scheme design and delivery including stakeholder management
• reviewing major planning applications as a statutory consultee and being a repository of expert advice on how walking and cycling provision can be improved, including through the planning system
• inspecting highway authorities on their performance on active travel which will influence funding it receives for other forms of transport
• increasing skills and capacity in local authorities, promoting best practice and enabling authorities to learn from each other and raising performance generally
• influencing key stakeholders, and the public debate, to see the value to society, individuals and business of active travel

Powers and duties

ATE’s statutory duties and functions are to be a statutory consultee on planning applications for major new developments and on land used for highways.

Aims

ATE’s strategic aims are to increase levels of walking and cycling to 50% of journeys in towns and cities by 2030 by:

• creating better streets and networks for cycling and walking that are built to the ‘key design principles’ as set out in Gear Change and Local Transport Note 1/20
• putting walking and cycling at the heart of transport, place-making, and health policy so travelling without a car is easy and accessible utilising a long-term walking and cycling programme and budget
• empowering and encouraging local authorities who manage their roads to incorporate active travel improvements into all aspects of their functions. This includes access to new powers to manage the highway effectively for active travel and training on all aspects of active travel best practice
• enabling people to cycle and protecting them when they do by reducing road danger through the creation of safe infrastructure based on the key design principles and working with the department and relevant bodies to ensure that the rules of the road work to protect people travelling actively

The strategic aims of the organisation are based on the recommendations in Gear Change.

The department will agree with ATE a timetable for transferring functions, budgets and responsibilities to it.

Responsible Minister

The Secretary of State for Transport will account for ATE on all matters concerning ATE in Parliament.

The Minister’s statutory powers in respect of ATE are outlined below. ATE’s role as a Statutory Consultee under the Planning Act will be set out under Schedule 4 of the Development Management Procedure Order, once secondary legislation has been passed.

The Minister:

• is responsible for the policy framework within which ATE operates

• provides guidance and direction to ensure the strategic aims and objectives of ATE are consistent with those of the department and government

• approves the ATE corporate plan and business plan

• has a power of appointment in relation to the appointment of the ATE Chair

• has a power of approval in relation to non-executives in line with the Governance Code on Public Appointments

Principal Accounting Officer

The Principal Accounting Officer (PAO) is the Permanent Secretary of the DfT.

The PAO of the DfT is accountable for ensuring ATE operates effectively and to a high standard of probity (acting in line with the principles of Managing Public Money). The PAO designates the Chief Executive Officer as ATE’s Accounting Officer and ensures they are fully aware of their responsibilities. The PAO issues a letter appointing the Accounting Officer, setting out their responsibilities and delegated authorities.

The respective responsibilities of the PAO and Accounting Officer are set out in Chapter 3 of Managing Public Money. The PAO is accountable to Parliament for the issue of any Parliamentary Supply to ATE.

The PAO shall ensure that any capital contribution provided to ATE is within the ambit and the amount of the Request for Resources and that Parliamentary authority and/or HM Treasury approval has been sought and given.

The PAO is responsible for ensuring the Responsible Minister receives appropriate advice on:

• the appropriate framework of objectives and targets for ATE in the light of the DfT’s wider strategic aims and priorities
• the appropriate budget for ATE in the light of the department’s overall public expenditure priorities
• how well ATE is achieving its strategic objectives and whether it is delivering value for money
• how effectively ATE is operating and meeting a high standard of probity
• the integration of ATE into transport systems at national level

The Investment, Portfolio and Delivery Committee (IPDC) is the department’s most senior investment committee and supports the PAO through providing advice, assurance, taking decisions (within its delegations) and making recommendations to Ministers and HM Treasury Ministers.

Role of the sponsorship team

The Active Travel sponsorship team in the department is the primary contact for ATE. The responsible Senior Civil Servant for this relationship is the Deputy Director for Active Travel. They are the main source of advice to the Responsible Minister on the discharge of their responsibilities in respect of ATE. They also support the PAO on their responsibilities toward ATE.

Effective relationships and interactions should be built at all levels between the sponsor function, the department and ATE, supported by clear roles, and effective collaboration.

Officials of the Active Travel team in the sponsor department will liaise regularly with ATE to review performance against plans, achievement against targets and expenditure against its departmental expenditure limits (DEL) and annually managed expenditure (AME) allocations. The sponsor team will also take the opportunity to explain wider policy developments that might have an impact on ATE.

Resolution of disputes between ATE and the DfT

Any disputes between the department and ATE will be resolved in as timely a manner as possible. The department and ATE will seek to resolve any disputes through an informal process in the first instance. If this is not possible, then a formal process, overseen by the Senior Sponsor, will be used to resolve the issue. Failing this, the Senior Sponsor will ask the relevant policy Director General to oversee the dispute. They may then choose to ask the Permanent Secretary to nominate a non-executive member of the department’s Board to review the dispute, mediate with both sides and reach an outcome, in consultation with the Secretary of State.

Freedom of information requests

Where a request for information is received by either party under the Freedom of Information Act 2000, or the Data Protection Act 1998 or 2018, the party receiving the request will consult with the other party prior to any disclosure of information that may affect the other party’s responsibilities.

Reporting on legal risk and litigation

ATE shall provide a quarterly update to the Sponsor on the existence of any active litigation and any threatened or reasonably anticipated litigation. The parties acknowledge the importance of ensuring that legal risks are communicated appropriately to the Sponsor in a timely manner.

In respect of each substantial piece of litigation involving ATE, the parties will agree a litigation protocol which will include specific provisions to ensure appropriate and timely reporting on the status of the litigation and the protection of legally privileged information transmitted to the Sponsor to facilitate this. Until such time as a protocol is agreed, the parties will ensure that:

• material developments in the litigation are communicated to the Sponsor in an appropriate and timely manner
• legally privileged documents and information are clearly marked as such
• individual employees handling the legally privileged documents are familiar with principles to which they must adhere to protect legal privilege
• circulation of privileged information within government occurs only as necessary

Governance and accountability

ATE shall operate corporate governance arrangements that, so far as practicable and in the light of the other provisions of this Framework Document or as otherwise may be mutually agreed, accord with good corporate governance practice and applicable regulatory requirements and expectations.

In particular (but without limitation), ATE should:

• comply with the principles and provisions of the Corporate Governance in Central Government Departments Code of Good Practice (as amended and updated from time to time) to the extent appropriate and in line with their statutory duties or specify and explain any non-compliance in its annual report
• comply with Managing Public Money
• in line Managing Public Money have regard to the relevant Functional Standards as appropriate and in those concerning Finance, Commercial and Counter Fraud
• take into account the codes of good practice and guidance set out at the end of this Framework Document, as they apply to Arm’s Length Bodies

In line with Managing Public Money Annex 3.1, ATE shall provide an account of corporate governance in its annual governance statement including the Board’s assessment of its compliance with the Code with explanations of any material departures. To the extent that the Company does intend to materially depart from the Code, the Sponsor should be notified in advance and their agreement sought to this approach.

The Chief Executive

Appointment

The Chief Executive of ATE is appointed by the department in collaboration with the Board. This appointment is a senior civil service appointment and should be carried out in compliance with the Civil Service Recruitment Principles, with the recruitment panel chaired by a Civil Service Commissioner and including the Chair of ATE’s Board.

Responsibilities of ATE’s Chief Executive as Accounting Officer

The Chief Executive as Accounting Officer is personally responsible for:

• safeguarding the public funds for which they have charge
• ensuring propriety, regularity, value for money and feasibility in the handling of those public funds
• the day-to-day operations and management of ATE.

In addition, they should ensure that ATE as a whole is run on the basis of the standards, in terms of governance, decision-making and financial management, that are set out in box 3.1 of Managing Public Money. These responsibilities include those listed here and those that are set in the Accounting Officer appointment letter issued by the Principal Accounting Officer of the sponsor department.

Responsibilities to Parliament and the public

Responsibilities to Parliament and the public include:

• signing the accounts and ensuring that proper records are kept relating to the accounts and that the accounts are properly prepared and presented in accordance with any directions issued by the Secretary of State
• preparing and signing a Governance Statement covering corporate governance, risk management and oversight of any local responsibilities, for inclusion in the annual report and accounts
• ensuring that effective procedures for handling complaints about ATE in accordance with Parliamentary and Health Service Ombudsman’s Principles of Good Complaint Handling are established and made widely known within ATE and published on gov.uk
• acting in accordance with the terms of Managing Public Money and other instructions and guidance issued from time to time by the department, the Treasury and the Cabinet Office
• ensuring that as part of the above compliance they are familiar with and act in accordance with:
  • any governing legislation
  • this Framework Document
  • any delegation letter issued to the body as set out in the Delegated authorities section
  • any elements of any settlement letter issued to the sponsor department that is relevant to the operation of ATE
  • any separate settlement letter that is issued to ATE from the sponsor department
• ensuring they have appropriate internal mechanisms for the monitoring, governance and external reporting regarding compliance with any conditions arising from the above documents
• giving evidence, normally with the PAO, when requested

Responsibilities to the Department for Transport

Responsibilities to the DfT include:

• establishing, in agreement with the department, ATE’s corporate and business plans in the light of the department’s wider strategic aims and agreed priorities
• informing the department of progress in helping to achieve the department’s policy objectives and in demonstrating how resources are being used to achieve those objectives
• ensuring that timely forecasts and monitoring information on performance and finance are provided to the department; that the department is notified promptly if over or under spends are likely and that corrective action is taken ensuring that any significant problems whether financial or otherwise, and whether detected by internal audit or by other means, are notified to the department in a timely fashion

Responsibilities to the Board

The Chief Executive is responsible for:

• advising the Board on the discharge of the ATE Board’s responsibilities as set out in this document, in the founding legislation and in any other relevant instructions and guidance that may be issued from time to time;
• advising the Board on ATE’s performance compared with its aims and objectives;
• ensuring that financial considerations are taken fully into account by the Board at all stages in reaching and executing its decisions, and that financial appraisal techniques are followed.

Managing conflicts

In executive agencies, final decisions, responsibility and accountability rest with the Chief Executive as Accounting Officer. However, the expectation is that the Chief Executive will follow the advice of the Board.

If the Board, or its Chair, is contemplating a course of action involving a transaction which the Chief Executive considers would infringe the requirements of propriety or regularity or does not represent prudent or economical administration, efficiency or effectiveness, is of questionable feasibility, or is unethical the Chief Executive in their role as Accounting Officer should reject that course of action and ensure that the Board have a full opportunity to discuss the rationale for that rejection.

The Chief Executive should confirm the rationale for not following the advice of the Board in writing to the Chair of the Board and the Principal Accounting Officer and copy that to the Treasury Officer of Accounts.

If the Responsible Minister agrees with the proposed course of action of the Board it may be appropriate for the Minister to direct the Accounting Officer in the manner as set out in Managing Public Money paragraph 3.6.6 onwards.

The Board

Composition of the Board

ATE will have a Board in line with good standards of Corporate Governance and as set out at the end of this document. The role of the Board shall be to govern ATE, determine the ATE strategy (in partnership with the DfT) and to deliver the Objectives, in accordance with the purposes as set out above, their statutory, regulatory, common law duties and their responsibilities under this Framework Document. Detailed responsibilities of the Board shall be set out in the Board’s terms of reference. Remuneration of the Board will be disclosed in line with the guidance in the Government Financial Reporting manual (FReM).

The Board will consist of a Chair, together with the Chief Executive and up to 7 non-executive members (and no less than 3) that have a balance of skills and experience appropriate to directing ATE’s business. For ATE there should be members who have experience of its business, operational delivery, corporate services such as HR, technology, finance and risk, property asset management, estate management, communications and performance management and with understanding of the relevant stakeholders. This will include as an executive and voting board member an appropriately qualified finance director as described in Annex 4.1 of Managing Public Money. The board should include a majority of independent non-executive members to ensure that executive members are supported and constructively challenged in their role.

Board committees

The Board may set up such committees as necessary for it to fulfil its functions. At a minimum this should include an Audit and Risk Committee chaired by an independent and appropriately qualified non-executive member of the Board.

While the Board may make use of committees to assist its consideration of appointments, succession, audit, risk and remuneration it retains responsibility for, and endorses, final decisions in all of these areas. The Chair should ensure that sufficient time is allowed at the Board for committees to report on the nature and content of discussion, on recommendations, and on actions to be taken.

Where there is disagreement between the relevant committee and the Board, adequate time should be made available for discussion of the issue with a view to resolving the disagreement. Where any such disagreement cannot be resolved, the committee concerned should have the right to report the issue to the sponsor team, Principal Accounting Officer and Responsible Minister. They may also seek to ensure the disagreement or concern is reflected as part of the report on its activities in the annual report.

The Chair should ensure Board committees are properly structured with appropriate terms of reference. The terms of each committee should set out its responsibilities and the authority delegated to it by the Board. The Chair should ensure that committee membership is periodically refreshed and that individual independent non-executive directors are not over-burdened when deciding the chairs and membership of committees.

Appointments to the Board

The National Active Travel Commissioner is the Chair of the ATE Board and is appointed by the Secretary of State. This appointment is subject to the Public Appointments Order in Council and as such must comply with the Governance Code on Public Appointments.

Up to seven and at a minimum three non-executive Members may be appointed by the Chair with approval from the Responsible Minister. The appointments are subject to the Public Appointments Order in Council and as such must comply with the Governance Code on Public Appointments.

All such appointments should have regard to the principle that appointments should reflect the diversity of the society in which we live, and appointments should be made taking account of the need to appoint boards which include a balance of skills and backgrounds.

The Minister shall have the following appointment and approval rights in relation to the ATE Board:

• non-executive members are appointed by the Chair with the approval of the responsible minister
• all such appointments should have regard to the principle that appointments should reflect the diversity of the society in which we live, and appointments should be made taking account of the need to appoint boards which include a balance of skills and backgrounds

Duties of the Board

The Board is specifically responsible for:

• establishing and taking forward the strategic aims and objectives of ATE consistent with its overall strategic direction and within the policy and resources framework determined by the Secretary of State
• providing effective leadership of ATE within a framework of prudent and effective controls which enables risk to be assessed and managed
• ensuring the financial and human resources are in place for ATE to meet its objectives
• reviewing management performance
• ensuring that the Board receives and reviews regular financial and management information concerning the management of ATE
• ensuring that it is kept informed of any changes which are likely to impact on the strategic direction of ATE or on the attainability of its targets, and determining the steps needed to deal with such changes and where appropriate bringing such matters to the attention of the Responsible Minister and Principal Accounting Officer via the executive team, sponsorship team or directly
• ensuring that any statutory or administrative requirements for the use of public funds are complied with; that the board operates within the limits of its statutory authority and any delegated authority agreed with the sponsor department, and in accordance with any other conditions relating to the use of public funds; and that, in reaching decisions, the Board takes into account guidance issued by the sponsor department
• ensuring that as part of the above compliance they are familiar with:
  • this Framework Document
  • any delegation letter issued to body
  • any elements of any settlement letter issued to the sponsor department that is relevant to the operation of ATE
  • any separate settlement letter that is issued to ATE from the sponsor department
  • that they have appropriate internal mechanisms for the monitoring, governance and external reporting regarding any conditions arising from the above documents and ensure that the Chief Executive and ATE as a whole act in accordance with their obligations under the above documents
• demonstrating high standards of corporate governance at all times, including by using the independent audit committee to help the Board to address key financial and other risks
• advising the department on appointing a Chief Executive and, in consultation with the department, setting performance objectives and remuneration terms linked to these objectives for the Chief Executive which give due weight to the proper management and use and utilisation of public resources
• putting in place mechanisms for independent appraisal and annual evaluation of the performance of the Chair by the independent non-executives, taking into account the views of relevant stakeholders. The outcome of that evaluation should be made available to the Responsible Minister
• determining all such other things which the Board considers ancillary or conducive to the attainment or fulfilment by ATE of its objectives

The Board should ensure that effective arrangements are in place to provide assurance on risk management, governance and internal control.

The Board should make a strategic choice about the style, shape and quality of risk management and should lead the assessment and management of opportunity and risk. The Board should ensure that effective arrangements are in place to provide assurance over the design and operation of risk management, governance and internal control in line with the Management of Risk – Principles and Concepts (The Orange Book). The Board must set up an Audit and Risk Assurance Committee chaired by an independent and appropriately qualified non-executive member to provide independent advice and ensure that the department’s Audit and Risk Assurance Committee are provided with routine assurances with escalation of any significant limitations or concerns. The Board is expected to assure itself of the adequacy and effectiveness of the risk management framework and the operation of internal control.

The Chair’s role and responsibilities

The National Active Travel Commissioner is the ATE Chair. The Chair is responsible for leading the Board in the delivery of its responsibilities. Such responsibility should be exercised in the light of their duties and responsibilities as set out in the Chair’s contract of employment, any appointment letter, the priorities in the chair’s letter issued to them by the sponsor team, the statutory authority governing ATE, this document and the documents and guidance referred to within this document.

Communications between ATE’s Board and the Responsible Minister should normally be through the Chair.

The Chair is bound by the Code of Conduct for Board Members of Public Bodies, which covers conduct in the role and includes the Nolan Principles of Public Life.

In addition, the Chair is responsible for:

• ensuring including by monitoring and engaging with appropriate governance arrangements that ATE’s affairs are conducted with probity
• ensuring that policies and actions support the Responsible Minister’s, and where relevant other Ministers’ wider strategic policies and where appropriate, these policies and actions should be clearly communicated and disseminated throughout ATE

The Chair has the following leadership responsibilities:

• formulating the Board’s strategy
• ensuring that the Board, in reaching decisions, takes proper account of guidance provided by the Responsible Minister or the department
• promoting the efficient and effective use of staff and other resources
• delivering high standards of regularity and propriety
• representing the views of the Board externally including to the public. Details of how the Chair can and should communicate for ATE shall be agreed by ATE and DfT

The Chair also has an obligation to ensure:

• the work of the Board and its members are reviewed and are working effectively including ongoing assessment of the performance of individual board members with a formal annual evaluation and more in-depth assessments of the performance of individual board members when being considered for re-appointment
• that in conducting assessments that the view of relevant stakeholders including employees and the sponsorship team are sought and considered
• that the Board has a balance of skills appropriate to directing ATE’s business, and that all directors including the Chair and Chief Executive continually update their skills, knowledge and familiarity with ATE to fulfil their role both on the board and committees – this will include but not be limited to skills and training in relation to financial management and reporting requirements, risk management and the requirements of Board membership within the public sector
• Board members are fully briefed on terms of appointment, duties, rights and responsibilities
• they, together with the other Board members, receives appropriate training on financial management and reporting requirements and on any differences that may exist between private and public sector practice
• the Responsible Minister is advised of ATE’s needs when Board vacancies arise
• there is a Board Operating Framework in place setting out the role and responsibilities of the Board consistent with the Government Code of Good Practice for Corporate Governance
• there is a code of practice for Board members in place, consistent with the Cabinet Office Code of Conduct for Board Members of Public Bodies

Individual board members responsibilities

Individual Board members should:

• comply at all times with the Code of Conduct for Board Members of Public Bodies, which covers conduct in the role and includes the Nolan Principles of Public Life as well as rules relating to the use of public funds and to conflicts of interest
• demonstrate adherence to the 12 Principles of Governance for all Public Body Non-Executive Directors as appropriate
• not misuse information gained in the course of their public service for personal gain or for political profit, nor seek to use the opportunity of public service to promote their private interests or those of connected persons or organisations
• comply with the Board’s rules on the acceptance of gifts and hospitality, and of business appointments
• act in good faith and in the best interests of ATE
• ensure they are familiar with any applicable guidance on the role of Public Sector non-executive directors and Boards that may be issued from time to time by the Cabinet Office, HM Treasury or wider government

Delegated authorities

ATE’s delegated authorities are set out in the delegation letter. This delegation letter may be updated and superseded by later versions which may be issued by the sponsor department in agreement with HM Treasury.

ATE will set out its portfolio and pipeline of projects and programmes to IPDC annually, and to the roads investment committee (RIC) twice a year. An ATE representative will be invited to attend the RIC. ATE will also seek DfT (and where required HMT) approval for larger schemes and schemes which are novel and contentious, with delegation limits set in the delegation letter. ATE will ensure that it has an investment committee or similar good governance to approve smaller investment decisions. The delegation letter will also set out in what circumstances ATE must notify the department about changes to any of its programmes – whether due to scope, time or budget.

In line with Managing Public Money Annex 2.2, delegations will be reviewed on an annual basis.

ATE shall obtain the department’s and where appropriate HM Treasury’s prior written approval before:

• entering into any undertaking to incur any expenditure that falls outside the delegations or which is not provided for in ATE’s annual budget as approved by the department
• incurring expenditure for any purpose that is or might be considered novel or contentious, or which has or could have significant future cost implications
• making any significant change in the scale of operation or funding of any initiative or particular scheme previously approved by the department
• making any change of policy or practice which has wider financial implications that might prove repercussive or which might significantly affect the future level of resources required
• carrying out policies that go against the principles, rules, guidance and advice in Managing Public Money

Spending authority

Once the budget has been approved by the sponsor department, and subject to any restrictions imposed by statute, the Responsible Minister’s instructions, HM Treasury settlement or delegation letters, ATE shall have authority to incur expenditure approved in the budget, on the following conditions:

• ATE shall comply with the delegations set out in the delegation letter. These delegations shall not be altered without the prior agreement of the sponsor department and as agreed by HM Treasury and Cabinet Office as appropriate
• ATE shall comply with Managing Public Money regarding novel, contentious or repercussive proposal
• inclusion of any planned and approved expenditure in the budget shall not remove the need to seek formal departmental approval where any proposed expenditure is outside the delegated limits or is for new schemes not previously agreed
• ATE shall provide the sponsor department with such information about its operations, performance, individual projects or other expenditure as the sponsor department may reasonably require
• ATE shall notify DfT Ministers prior to allocating funding

Banking and managing cash

ATE must maximise the use of publicly procured banking services (accounts with central government commercial banks managed centrally by Government Banking)

ATE should only hold money outside Government Banking Service accounts where a good business case can made for doing so and HM Treasury consent is required for each account to be established. Only commercial banks which are members of relevant UK clearing bodies may be considered for this purpose.

Commercial Accounts where approved should be operated in line with the principles as set out in Managing Public Money.

The Accounting Officer is responsible for ensuring ATE has a Banking Policy as set out in Managing Public Money and ensuring that policy is complied with.

Procurement

ATE shall ensure that its procurement policies are aligned with and comply with any relevant UK or other international procurement rules and in particular the Public Contracts Regulations 2015.

ATE shall establish its procurement policies and document these in a Procurement Policy and Procedures Manual.

In procurement cases where ATE is likely to exceed its delegated authority limit, procurement strategy approval for the specific planned purchase must be sought from the department’s sponsor team.

Goods, services, and works should be acquired by competition. Proposals to let single-tender or restricted contracts shall be limited and exceptional, and a quarterly report explaining those exceptions should be sent to the department.

Procurement by ATE of works, equipment, goods, and services shall be based on, a full option appraisal and value for money (VfM), that is, the optimum combination and whole life costs and quality (fitness for purpose).

ATE shall :

• engage fully with department and government wide procurement initiatives that seek to achieve VfM from collaborative projects
• comply with all relevant Procurement Policy Notes issued by Cabinet Office
• co-operate fully with initiatives to improve the availability of procurement data to facilitate the achievement of VfM

ATE shall comply with the Commercial and Grants Standards . These standards apply to the planning, delivery, and management of government commercial activity, including management of grants in all departments and arm’s length bodies, regardless of commercial approach used and form part of a suite of functional standards that set expectations for management within government.

Risk management

ATE shall ensure that the risks that it faces are dealt with in an appropriate manner, in accordance with relevant aspects of best practice in corporate governance, and develop a risk management strategy, in accordance with the Treasury guidance Management of Risk: Principles and Concepts.

Counter-fraud and theft

ATE should adopt and implement policies and practices to safeguard itself against fraud and theft.

ATE should act in line with guidance as issued by the Counter Fraud Function and in compliance with the procedures and considerations as set in in Managing Public Money Annex 4.9 and the Counter Fraud Functional Standard. It should also take all reasonable steps to appraise the financial standing of any firm or other body with which it intends to enter a contract or to provide grant.

ATE should keep records of and prepare and forward to the department an annual report on fraud and theft suffered by ATE and notify the sponsor department of any unusual or major incidents as soon as possible. ATE should also report detected loss from fraud, bribery, corruption and error, alongside associated recoveries and prevented losses, to the counter fraud centre of expertise in line with the agreed government definitions as set out in Counter Fraud Functional Standard.

Staff

Broad responsibilities for staff

The Chief Executive is responsible for the human resource management of the Agency’s staff, within the context of civil service and departmental policies. The Chief Executive is responsible for recruiting, retaining and motivating staff, including contingent staff, so that:

• there is an inclusive culture in which diversity is fully valued; appointment and advancement is based on the Civil Service Recruitment Principles: and where there is no discrimination on grounds of gender, marital status, sexual orientation, race, colour, ethnic or national origin, religion, disability, community background or age
• as part of a commitment to inclusion, ATE should provide data to the department to support the annual Gender Pay Gap reporting and Equality Monitoring reporting
• the level and structure of its staffing, including grading and staff numbers, are appropriate to its functions and the requirements of economy, efficiency and effectiveness
• adequate grievance and disciplinary procedures are in place
• whistle-blowing procedures consistent with the Public Interest Disclosure Act are in place
• the performance of its staff at all levels is satisfactorily appraised and the DfT Group wide performance measurement systems are reviewed every five years
• staff are encouraged to acquire the appropriate professional, management and other expertise necessary to achieve ATE’s objectives
• proper consultation with staff and unions takes place on key issues affecting them

Staff costs

Subject to its delegated authorities, ATE shall ensure that the creation of any additional posts does not incur forward commitments that will exceed its ability to pay for them, without agreeing with the Sponsorship Team.

Pay and conditions of service

Agency staff are subject to levels of remuneration and terms and conditions of service (including pensions) within the general pay structure approved by the department and the Treasury. The Agency has no delegated power to amend these terms and conditions. ATE staff who are members of the Senior Civil Service are subject to the terms and conditions as set across the Civil Service by the Cabinet Office (including levels of remuneration and pensions). DfT Group wide pay setting arrangements will take account of the annual Civil Service Pay Remit Guidance issued by the Cabinet Office. Delegations provided to ATE, and when departmental approval is required, are set out in HR delegations.

Civil service terms and conditions of service apply to the rates of pay and non-pay allowances paid to the staff and to any other party entitled to payment in respect of travel expenses or other allowances, payment shall be made in accordance with the Civil Service Management Code and other relevant guidance such as the annual Civil Service Pay Remit Guidance, except where prior approval has been given by the department to vary such rates.

The Agency shall comply with the applicable UK statute on contract workers – the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations.

Staff terms and conditions are set out in the DfT Staff Handbook an Employee Handbook, which sets out terms and conditions for the Agency’s staff based on the Cabinet Office’s Model Code for Staff of Executive Non-Departmental Bodies. This should be provided to the department together with subsequent amendments.

ATE shall abide by public sector pay controls, including the relevant approvals process as detailed in the Senior Pay Guidance and the public sector pay and terms guidance.

ATE shall follow the DfT Group wide approach to non-consolidated payments and any performance related payments for SCS and non SCS staff. For non SCS staff, ATE can determine how best to operate this system to support business objectives and priorities. ATE must monitor the allocation of these payments and complete an equality impact assessment and regular review of the data to ensure no groups are disadvantaged as a result of the system they implement.

Board members pay is fixed but will be voluntary, enabling Board members to act in a pro bono capacity if they choose to do so. The travel expenses of non-executive board members shall be tied to the rates allowed for all ATE staff, in accordance with departmental rates. Reasonable actual costs incurred that follow this guidance, with evidence, shall be reimbursed.

For the avoidance of doubt, departmental travel and subsistence policy states that for UK rail and air travel all staff must travel standard class irrespective of grade, except under certain circumstances, including;

• temporary or permanent disability
• pregnancy related reasons

A temporary disability might include conditions such as a broken leg or arm, or any injury or other condition that affects mobility. A permanent disability is as defined by the Equality Act 2010.

Pensions, redundancy and compensation

Compensation scheme rules and pension scheme rules should reflect legislative and HM Treasury guidance requirements regarding exit payments.

The Agency staff shall normally be eligible for a pension provided by the Principal Civil Service Pension Scheme (PCSPS). Staff may opt out of the occupational pension scheme provided.

Any proposal by ATE to move from the existing pension arrangements, or to pay any redundancy or compensation for loss of office, requires the prior approval of the department. Proposals on severance must comply with the rules in chapter 4 of Managing Public Money.

Any proposals for redundancy and the use of the Civil Service Compensation Scheme must be approved by the Cabinet Office in addition to the department.

Any compensation for individuals as a result of formal performance or attendance management process should be done in line with the efficiency compensation payment guidance from the Civil Service Compensation Scheme. Compensation must be approved by the ATE HR Director and the DfT Group HR Director.

The Chief Executive is responsible for employee relations within the Agency. The Agency is committed to making full use of the skills and talents of staff and to provide them with an opportunity to contribute to decisions affecting their jobs.

The Agency attaches importance to engagement with staff. It will formally recognise appropriate unions is due course as representing the Agency’s staff, and will ensure appropriate consultative arrangements exist with them in accordance with the DfT Employee Relations Framework. In addition, the Agency also communicates and consults with staff who have not decided to join a union.

Other controls

All recruitment should be carried out in compliance with the Civil Service Recruitment Principles. ATE will be part of the annual audit by the Civil Service Commissioners of the department’s recruitment over the last 12 months.

When procuring consultancy and / or professional services, ATE should seek approval from the department approvals committee (DAC) and from Cabinet Office (via the online portal) according to the spend control thresholds.

Approval thresholds for consultancy and professional services

Approval for spending on contracts valued at £100,000 or more and / or 3 months or more must be granted by a departmental minister (or Accounting Officer / Chief Executive Officer for organisations with no minister). For contracts costing £500,000 or more and / or at least 9 months duration, organisations must also receive Cabinet Office’s approval. (All amounts should be excluding VAT but including any fees.)

When procuring contingent labour ATE must seek approval from the department approvals committee (DAC) and from Cabinet Office (via the online portal) according to the labour spend control thresholds. The contingent labour provider will be via the Public Sector Resourcing contract.

Approval thresholds

Contingent Labour (CL) contracts with day rates of £750 or over or durations of 12 months or over must be approved by a departmental minister (or Accounting Officer for organisations with no minister).

For contracts with day rates of £1,000 or over or durations of 18 months of over, organisations must also receive Cabinet Office’s approval.

In addition, bulk recruitment campaigns (recruiting more than one person in a single campaign), with total costs of £500,000 or over are in the scope of the spending control and must be approved by the Cabinet Office. (All amounts should be excluding VAT but including any fees.)

ATE should use Civil Service Learning for generic learning and development services (new or contract extensions) outside the core curriculum, and for department-specific learning and development services above the threshold.

Threshold: Approval is required for organisation-specific learning and development services above £10,000 (new or contract extensions).

ATE should adopt the Civil Service Functional Standards where it has its own stand-alone functions, or will receive group wide services from the department for these functions which will adopt the standards.

ATE should work with the department to provide the necessary organisational data for transparency data publications and other mandatory returns from Cabinet Office or HM Treasury.

As a DfT Agency, ATE will receive some HR services from the Group HR model or from Civil Service HR. These services will be provided for ATE to access in support of delivering their people agenda. The costs for these services will be recharged to ATE from the department.

Business plans, financial reporting and management information

Corporate and business plans

By the end of the financial year, ATE shall submit annually to the sponsor department a draft of the corporate plan covering three years ahead. ATE shall agree with the department the issues to be addressed in the plan and the timetable for its preparation. The plan shall reflect ATE’s statutory and/or other duties and, within those duties, the priorities set from time to time by the Responsible Minister (including decisions taken on policy and resources in the light of wider public expenditure decisions). The plan shall demonstrate how ATE contributes to the achievement of the department’s medium-term plan and priorities and aligned performance metrics and milestones.

The first year of the corporate plan, amplified as necessary, shall form the business plan. The business plan shall be updated to include key targets and milestones for the year immediately ahead and shall be linked to budgeting information so that resources allocated to achieve specific objectives can readily be identified by the department. Subject to any commercial considerations, a digest of the corporate and business plans should be published by ATE on its website and separately be made available to staff.

The following key matters should be included in the plans:

• key objectives and associated key performance targets for the forward years, and the strategy for achieving those objectives
• key non-financial performance targets
• a review of performance in the preceding financial year, together with comparable out-turns for the previous 2-5 years, and an estimate of performance in the current year
• alternative scenarios and an assessment of the risk factors that may significantly affect the execution of the plan but that cannot be accurately forecast
• other matters as agreed between the department and ATE

Budgeting procedures

Corporate and business planning is to be approved by relevant DfT investment boards (that is, IPDC for Tier 1 investment decisions and group investment board for Tier 2). Each year, in the light of decisions by the department on the updated draft corporate plan, the department will send to ATE:

• a formal statement of the annual budgetary provision allocated by the department in the light of competing priorities across the department and of any forecast income approved by the department
• a statement of any planned change in policies affecting ATE, for example, in relation to publication of future Cycling and Walking Investment Strategies and other statutory strategies and plans.

The approved annual business plan will take account both of approved funding provision, where this applies, and any forecast receipts, and will include a budget of estimated payments and receipts together with a profile of expected expenditure and of draw-down of any departmental funding and/or other income over the year. These elements form part of the approved business plan for the year in question.

Annual report and accounts

The ATE Board must publish an annual report of its activities together with its audited accounts after the end of each financial year. ATE shall provide the department its finalised (audited) accounts each year in order for the accounts to be consolidated within the DfT. A draft of the report should be submitted to the department two weeks before the proposed publication date. The accounts should be prepared in accordance with the relevant statutes and specific accounts direction issued by the department as well as the Treasury’s Financial Reporting Manual (FReM).

The annual report must be approved by Ministers and:

• cover any corporate, subsidiary or joint ventures under its control
• comply with the FreM and in particular have regard to the illustrative statements for an Executive Agency
• outline main activities and performance during the previous financial year and set out in summary form forward plans
• information on performance against key financial targets is included within the annual report and subject to the auditor’s consistency opinion
• the report and accounts shall be laid in Parliament and made available on ATE’s website, in accordance with the guidance in the FReM

Reporting performance to the Department for Transport

ATE shall operate management, information and accounting systems that enable it to review in a timely and effective manner its financial and non-financial performance against the budgets and targets set out in the corporate and business plans.

ATE shall inform the sponsor department of any changes that make achievement of objectives difficult. It shall report financial and non-financial performance, including performance in helping to deliver Ministers’ policies, and the achievement of key objectives, regularly.

ATE’s performance shall be formally reviewed by the department annually, if required to supplement regular board attendance and annual business case review.

The Responsible Minister will meet the Chair and the Chief Executive at least once a year.

The Principal Accounting officer will meet the Chief Executive at least once a year.

Information sharing

The department has the right of access to all ATE’s records and personnel for any purpose including, for example, sponsorship audits and operational investigations.

ATE shall provide the sponsor department with such information about its operations, performance, individual projects or other expenditure as the sponsor department may reasonably require.

The department and HM Treasury may request the sharing of data held by ATE in such a manner as set out in central guidance except insofar as it is prohibited by law. This may include requiring the appointment of a senior official to be responsible for the data sharing relationship.

As a minimum, ATE shall provide the department with information monthly that will enable the department satisfactorily to monitor:

• ATE’s cash management
• forecast outturn by resource headings
• other data required for the Online System for Central Accounting and Reporting (OSCAR)
• data as required in respect of its compliance with any Cabinet Office Controls pipelines or required in order to meet any condition as set out in any settlement letter

Internal audit

ATE shall:

• set up an audit committee of its board in accordance with the Code of Good Practice for Corporate Governance and the Audit and Risk Assurance Committee Handbook;
• be represented on the DfT’s Audit Committee
• ensure that the sponsor department’s internal audit team have complete access to all relevant records
• ensure that any arrangements for internal audit are in accordance with the Public Sector Internal Audit Standards (PSIAS) as adopted by HM Treasury

External audit

The Comptroller and Auditor General (C&AG) passes the audited accounts to the Secretary of State who will lay the accounts together with the C&AG’s report before parliament.

In the event that ATE has set up and controls subsidiary companies, ATE will – in the light of the provisions in the Companies Act 2006 – ensure that the C&AG has the option to be appointed auditor of those company subsidiaries that it controls and/or whose accounts are consolidated within its own accounts. ATE shall discuss with the sponsor department the procedures for appointing the C&AG as auditor of the companies.

The C&AG:

• will consult the department and ATE on whom – the NAO or a commercial auditor – shall undertake the audit(s) on his behalf, though the final decision rests with the C&AG
• has a statutory right of access to relevant documents, including by virtue of section 25(8) of the Government Resources and Accounts Act 2000, held by another party in receipt of payments or grants from ATE
• will share with the sponsor department information identified during the audit process and the audit report (together with any other outputs) at the end of the audit, in particular on issues impacting on the Department’s responsibilities in relation to financial systems within ATE
• will consider requests from departments and other relevant bodies to provide Regulatory Compliance Reports and other similar reports at the commencement of the audit. Consistent with the C&AG’s independent status, the provision of such reports is entirely at the C&AG’s discretion

The C&AG may carry out examinations into the economy, efficiency and effectiveness with which ATE has used its resources in discharging its functions. For these examinations the C&AG has statutory access to documents as provided for under section 8 of the National Audit Act 1983. In addition, ATE shall provide, in conditions to grants and contracts, for the C&AG to exercise such access to documents held by grant recipients and contractors and sub-contractors as may be required for these examinations; and shall use its best endeavours to secure access for the C&AG to any other documents required by the C&AG which are held by other bodies.

Review of Active Travel England’s status

In accordance with Cabinet Office guidance, ATE shall be reviewed every three years. The date of the next review will be 2025.

Arrangements in the event Active Travel England is wound up

The sponsor department shall put in place arrangements to ensure the orderly winding up of ATE. It should ensure that the assets and liabilities of ATE are passed to any successor organisation and accounted for properly. (In the event that there is no successor organisation, the assets and liabilities should revert to the sponsor department.) To this end, the department shall:

• have regard to Cabinet Office guidance on winding up of arms-length bodies (ALBs) (PDF)
• ensure that procedures are in place in ATE to gain independent assurance on key transactions, financial commitments, cash flows and other information needed to handle the wind-up effectively and to maintain the momentum of work inherited by any residuary body
• specify the basis for the valuation and accounting treatment of ATE’s assets and liabilities
• ensure that arrangements are in place to prepare closing accounts and pass to the C&AG for external audit, and that, for non-Crown bodies funds are in place to pay for such audits – it shall be for the C&AG to lay the final accounts in Parliament, together with his report on the accounts
• arrange for the most appropriate person to sign the closing accounts
• in the event that another ALB takes on the role, responsibilities, assets and liabilities, the succeeding ALB Accounting Officer should sign the closing accounts
• in the event that the department inherits the role, responsibilities, assets and liabilities, the sponsor department’s Accounting Officer should sign

ATE shall provide the department with full details of all agreements where ATE or its successors have a right to share in the financial gains of developers. It should also pass to the department details of any other forms of claw-back due to ATE.

HR Delegations

ATE is an executive agency of the DfT. As with many Executive Agencies, it will operate in part in a similar way to the DfT, with some functions transferring over. However, it will also need recourse to specialist and scarce skills. Year 1 of the ATE function will also be a transition year, with a number of posts hired on a temporary/ interim basis while the agency is established. For this reason, this approach is proposed to be reviewed after 1 year, once the staffing needs are clearer, and the challenges or otherwise more apparent. It is therefore important to balance the following concerns and goals:

• to preserve the integrity of the DfT pay structure, and maintain civil service pay restraint
• to ensure that ATE can secure the skills it needs to fulfil its responsibilities, often in a competitive market for scarce skills
• to ensure that decisions over hiring both permanent and temporary staff can be made quickly, without undue delay over approvals

Delegations framework: Summary of the scope of delegation permitted to ATE

Hiring at SCS level:

• none - DfT lead the recruitment process for all SCS roles
• approvals process and pay scales to operate within DfT and civil service rules

Hiring below SCS level all roles:

• to work within Civil Service Recruitment Principles as being Fair, Open and on Merit or using Exceptions where appropriate with Civil Service Commission approval where required
• to work within DfT pay rules – for any exceptions to the standards for example a higher starting salary or RRA payment
• a business case must be prepared for the DfT Group Reward team for their review and approval prior to any advert going live or any offer being made to individuals

Procuring consultancy or professional services:

• to procure up to £100,000 and/or up to 3 months
• DAC process must be followed for approval and relevant Cabinet Office approvals if thresholds are triggered

Procuring contingent labour:

• to procure up to £750 per day and/or up to 12 months via Public Sector Resourcing
• DAC process must be followed for approval and relevant Cabinet Office approvals if thresholds are triggered

Compliance with government-wide corporate governance and instructions

ATE shall comply with the following general guidance documents and instructions as updated from time-to-time unless otherwise agreed with the department and, as appropriate, HM Treasury or the Cabinet Office:

• Audit and Risk Assurance Committee Handbook
• Cabinet Office Guidance on settlement agreements, special severance payments and confidentiality clauses on termination of employment (PDF)
• Code of Conduct for Board Members of Public Bodies
• Code of Practice for Ministerial Appointments to Public Bodies
• Consolidated Budgeting Guidance
• Corporate Governance in Central Government Departments: Code of Good Practice
• Government Financial Reporting Manual (FReM)
• Guidance for approval of senior pay
• Managing Public Money
• Management of Risk: Principles and Concepts

Other relevant guidance and instructions issued by HM Treasury in respect of Whole of Government Accounts:

• Other relevant instructions and guidance issued by government as advised to ATE by the department;
• Public Sector Internal Audit Standards